The methods of money production in society today are profoundly corrupting in ways that would matter to everyone if they were clearly understood. The essence of this debate is: who should be allowed to create money, how and at whose risk?………

……One of the most memorable quotes about money and banking is usually attributed to Henry Ford:

“It is well enough that people of the nation do not understand our banking and monetary system, for if they did I believe there would be a revolution before tomorrow morning.”………..

How is it done? The process is so simple that the mind is repelled. It is this:

“Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.”

I have been told many times that this is ridiculous, even by one employee who had previously worked for the Federal Deposit Insurance Corporation of the United States. The explanation is taken from the Bank of England article, “Money creation in the modern economy”, and it seems to me it is rather hard to dismiss……..

It is a criminal offence to counterfeit bank notes or coins, but a banking licence is formal permission from the Government to create equivalent money at interest…….

There is a wide range of perspectives on whether that is legitimate. The Spanish economist, Jesús Huerta de Soto explains in his book “Money, Bank Credit and Economic Cycles” that it is positively a fraud—a fraud that causes the business cycle. Positive Money, a British campaign group, is campaigning for the complete nationalisation of money production……..

We are in a debt crisis of historic proportions because for far too long profit-maximising banks have been lending money into existence as debt with too few effective restraints on their conduct and all the risks of doing so forced on the taxpayer by the power of the state. A blend of legal privilege, private interest and political necessity has created, over the centuries, a system that today lawfully promotes the excesses for which capitalism is so frequently condemned. It is undermining faith in the market economy on which we rely not merely for our prosperity, but for our lives………….

Even before quantitative easing began, we lived in an era of chronic monetary inflation, unprecedented in the industrial age. Between 1991 and 2009, the money supply increased fourfold. It tripled between 1997 and 2010, from £700 billion to £2.2 trillion, and that accelerated into the crisis. It is simply not possible to increase the money supply at such a rate without profound consequences, and they are the consequences that are with us today, but it goes back further. The House of Commons Library and the Office for National Statistics produced a paper tracing consumer price inflation back to 1750. It shows that there was a flat line until about the 20th century, when there was some inflation over the wars, but from 1971 onwards, the value of money collapsed. What had happened?…….

where did all the money that was created as debt go? The sectoral lending figures show that while some of it went into commercial property, and some into personal loans, credit cards and so on, the rise of lending into real productive businesses excluding the financial sector was relatively moderate. Overwhelmingly, the new debt went into mortgages and the financial sector…….

Money is used to buy houses, and we

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should not be at all surprised that an increased supply of money into house-buying will boost the price of those homes…………

My point is that if a great fountain of new money gushes up into the financial sector, we should not be surprised to find that the banking system is far wealthier than anyone else. We should not be surprised if financing and housing in London and the south-east are far wealthier than anywhere else. Indeed, I remember that when quantitative easing began, house prices started rising in Chiswick and Islington. Money is not neutral. It redistributes real income from later to earlier owners—that is, from the poor to the rich, on the whole…………

Once the Bank legitimises the idea of money creation and giving it to people in order to get the economy going, the question then arises: if you are going to create it and give it away, why not give it to other people? That then goes to the question: what is money? I think it is the basis of a moral existence, because in our lives we should be exchanging value for value. One problem with the current system is that we are not doing that; something is being created in vast quantities out of nothing and given away. The Bank explains that 40% of the assets that have been inflated are held by 5% of households, with 80% held by people over 45. It seems clear that QE—a policy of the state to intervene deeply in money—is a deliberate policy of increasing the wealth of people who are older and wealthier.

Douglas Carswell (Clacton) (UKIP): I congratulate the hon. Gentleman on bringing this important subject to the attention of the House. Does he agree that, far from shoring up free market capitalism, the candy floss credit system the state is presiding over replaces it with a system of crony corporatism that gives capitalism a bad name and undermines its very foundations?

Steve Baker: I am delighted to agree with my hon. Friend—he is that, despite the fact I will not be seeing Nigel later. We have ended up pretending that the banking system and the financial system is a free market when the truth is that it is the most hideous corporatist mess. What I want is a free market banking system, and I will come on to discuss that.

11.45 am

Mr Michael Meacher (Oldham West and Royton) (Lab):

It is unfortunate that it is so little understood by the public that money is created by the banks every time they make a loan. In effect, the banks have a virtual monopoly—about 97%—over domestic credit creation, so they determine how money is allocated across the economy. That has led to the vast majority of money being channelled into property markets and the financial sector. According to Bank of England figures for the decade to 2007, 31% of additional money created by bank lending went to mortgage lending, 20% to commercial property, and 32% to the financial sector, including to mergers and acquisitions and trading and financial markets. Those are extraordinary figures…

……the overwhelming majority of the money created inflates property prices, pushing up the cost of living.

In a nutshell, the banks have too much power and they have greatly abused it. First, they have been granted enormous privileges since they can create wealth simply by writing an accounting entry on a register. They decide who uses that wealth and for what purpose and they have used their power of credit creation hugely to favour property and consumption lending over business investment because the returns are higher and more secure. Thus the banks maximise their own interests but not the national interest.

Mr Jim Cunningham (Coventry South) (Lab): Given what my right hon. Friend has just said, is there not an argument, in this situation of unlimited credit from banks, for the Bank of England to intervene?

Mr Meacher: My hon. Friend anticipates the main line of my argument, so if he is patient I think I will be able to satisfy him. Crucially, only 8% of the money referred to went to businesses outside the financial sector, with a further 8% funding credit cards and personal loans….

…..The question at the heart of the debate is who should create the money? Would Parliament ever have voted to delegate power to create money to those same banks that caused the horrendous financial crisis that the world is still suffering? I think the answer is unambiguously no. The question that needs to be put is how we should achieve the switch from unbridled consumerism to a framework of productive investment capable of generating a successful and sustainable manufacturing and industrial base that can securely underpin UK living standards….

…Under the current system, around just 80 board members across the largest five banks make decisions that shape the entire UK economy, even though these individuals have no obligation or mandate to consider the needs of society or the economy as a whole, and are not accountable in any way to the public: it is for the maximisation of their own interests, not the national interest. Under sovereign money, the money creation committee would be highly transparent—we have discussed this already—and accountable to Parliament.

Mr MacNeil: I hear what the right hon. Gentleman says about money going into building, housing and mortgages, but is that not because the holders of money reckon that they can get a decent return from that sector? They would invest elsewhere if they thought that they could get a better return. One reason why the UK gets a better return from that area than, say, Germany is that we have no rent controls. As a result, money is more likely to go into property than into developing industry, which is more likely to happen in Germany.

Mr Meacher:

…………………..The question at the heart of the debate is who should create the money? Would Parliament ever have voted to delegate power to create money to those same banks that caused the horrendous financial crisis that the world is still suffering? I think the answer is unambiguously no.

For all those reasons, the examination of the merits of a sovereign monetary system is now urgently needed, and I call on the Government to set up a commission on money and credit, with particular reference to the potential benefits of sovereign money, which offers a way out of

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the continuing and worsening financial crises that have blighted this country and the whole international economy for decades……..

12.13 pm

Mr Peter Lilley (Hitchin and Harpenden) (Con):

…………A lot has been made of the ignorance of Members of Parliament of how money is created. I suspect that that ignorance, not just in Members of Parliament but in the intellectual elite in this country, explains many things, not least why we entered the financial crisis with a regulatory system that was so unprepared for a banking crisis……….

First, all bankers—not just rogue bankers but even the best, the most honourable and the most honest—do things that would land the rest of us in jail. Near my house in France is a large grain silo. After the harvest, farmers deposit grain in it. The silo gives them a certificate for every tonne of grain that they deposit. They can withdraw that amount of grain whenever they want by presenting that certificate. If the silo owner issued more certificates than there was grain kept in his silo, he would go to jail, but that is effectively what bankers do. They keep as reserves only a fraction of the money deposited with them, which is why we call the system the fractional reserve banking system. Murray Rothbard, a much neglected Austrian economist in this country, said very flatly that banking is therefore fraud: fractional reserve banking is fraud; it should be outlawed; banks should be required to keep 100% reserves against the money they lend out. ……….

If a bank lends a company £10 million, it does not need to go and borrow that money from a saver; it simply creates an extra £10 million by electronically crediting the company’s bank account with that sum. It creates £10 million out of thin air. By contrast, when a bank loan is repaid, that extinguishes money; it disappears into thin air. The total money supply increases when banks create new loans faster than old loans are repaid…….

spivs and crooks have a field day.”—[Official Report, 11 November 1997; Vol. 300, c. 731-32.]

Bob Stewart (Beckenham) (Con): I am listening carefully to my right hon. Friend. Does that mean that the banks are uncontrollable, as things stand?

The same banks that caused the financial crisis currently have the power to create 97% of the UK’s money. They’ve used this power recklessly, putting most of the money they create into property bubbles and financial markets. And now they’re back to their old ways.

We need a change. The power to create money should only be used in the public interest, in a democratic, transparent and accountable way. The 1844 law that makes it illegal for anyone other than the Bank of England to create paper money should be updated to apply to the electronic money currently created by banks.

Banks create new money, in the form of the numbers (deposits) that appear in bank accounts, through the accounting process used when they make loans. In the words of the Bank of England:

“When a bank makes a loan, for example to someone taking out a mortgage to buy a house, it does not typically do so by giving them thousands of pounds worth of banknotes. Instead, it credits their bank account with a bank deposit of the size of the mortgage. At that moment, new money is created.” (Bank of England Quarterly Bulletin, 2014 Q1)

Conversely, when people use those deposits to repay loans, the process is reversed and money effectively disappears from the economy. As the Bank of England describes:

“Just as taking out a loan creates new money, the repayment of bank loans destroys money. … Banks making loans and consumers repaying them are the most significant ways in which bank deposits are created and destroyed in the modern economy.” (Bank of England Quarterly Bulletin, 2014 Q1)

When new money is created, it should be used to fund vital public services or provide finance to businesses, creating jobs where they’re needed, instead of being used to push up house prices or speculate on the financial markets.

It is based on the proposals outlined in Modernising Money (2013) by Andrew Jackson and Ben Dyson, which in turn builds on the work of Irving Fisher in the 1930s, James Robertson and Joseph Huber in Creating New Money (2000), and a submission made to the Independent Commission on Banking by Positive Money, New Economics Foundation and Professor Richard Werner (2010).

Taking the power to create money out of the hands of banks would end the instability and boom-and-bust cycles that are caused when banks create too much money in a short period of time. It would also ensure that banks could be allowed to fail without bailouts from taxpayers. It would ensure that newly created money is spent into the economy, so that it can reduce the overall debt burden of the public, rather than being lent into existence as happens currently.

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Problem: Around a third of the money created by banks goes towards mortgage lending (and a further significant proportion goes towards commercial property). This creation of money to buy pre-existing assets (i.e. houses in limited supply, and the underlying land which is in fixed supply) leads to prices rising. Rising house prices make banks even more confident about lending further amounts for mortgages (since rising prices mean that they are unlikely to lose money even in the event of a default and repossession). This becomes a highly pro-cyclical process, leading to house price bubbles.

Sovereign money as a solution: There is a need for a number of policy and tax reforms to address the problem of unaffordable housing (particularly in the UK). However, removing the ability of banks to create money will remove much of the fuel for house price inflation. House prices that rise at a lower rate than growth in wages will mean that housing becomes more affordable over time.

8. SLOWING THE RISE IN INEQUALITY

Problem: House price bubbles have the effect of transferring wealth from the young to the old, and from those who cannot get on the property ‘ladder’ to those who can. This is a significant channel through which wealth inequality is further increased.

Furthermore, the fact that the nation’s money supply must be borrowed from banks means that we are having to pay interest on the entire money supply. Household income data surveys show that this has the effect of transferring income from the bottom 90% of the population to the top 10%. (See Chapter 5 of Modernising Money for further details).

Sovereign money as a solution: As discussed above, removing the ability of banks to create money should have a dampening effect on house price rises, which in turn will reduce the rate of growth in wealth inequality.

The creation, by the central bank, of money that has no corresponding interest-bearing debt, means that there is a stock of money that is effectively ‘debt free’, and no need for members of the public to borrow simply to ensure that there is money available in the economy. The resulting lower levels of private debt will mean that less interest is paid overall, and therefore less income is transferred to the top 10% of the population. Again, this will slow the rate of growth in inequality.

Q: Why doesn’t bank advertising mention this?
A: It would not be in good taste. But it is mentioned by implication in references to reserves of £249,000,000,000 or thereabouts. That is the money they have made.

Q: Out of the customers?
A: I suppose so.

Q: They also mention Assets of £500,000,000,000 or thereabouts. Have they made that too?
A: Not exactly. That is the money they use to make money.

Q: I see. And they keep it in a safe somewhere?
A: Not at all. They lend it to customers.

Q: Then they haven’t got it?
A: No.

Q: Then how is it Assets?
A: They maintain that it would be if they got it back.

Q: But they must have some money in a safe somewhere?
A: Yes, usually £500,000,000,000 or thereabouts. This is called Liabilities.

Q: But if they’ve got it, how can they be liable for it?
A: Because it isn’t theirs.

Q: Then why do they have it?
A: It has been lent to them by customers.

Q: You mean customers lend banks money?
A: In effect. They put money into their accounts, so it is really lent to the banks.

Q: And what do the banks do with it?
A: Lend it to other customers.

Q: But you said that money they lent to other people was Assets?
A: Yes.

Q: Then Assets and Liabilities must be the same thing?
A: You can’t really say that.

Q: But you’ve just said it! If I put £100 into my account the bank is liable to have to pay it back, so it’s Liabilities. But they go and lend it to someone else and he is liable to have to pay it back, so it’s Assets. It’s the same £100 isn’t it?
A: Yes, but..

Q: Then it cancels out. It means, doesn’t it, that banks haven’t really any money at all?
A: Theoretically..

Q: Never mind theoretically! And if they haven’t any money, where do they get their Reserves of £249,000,000,000 or thereabouts??
A: I told you. That is the money they have made.

Q: How?
A: Well, when they lend your £100 to someone they charge him interest.

Q: How much?
A: It depends on the Bank Rate. Say five and a- half percent. That’s their profit.

“The Economist on July 3, 2012 suggested that it is possible to revive the US economy by means of monetary pumping. They believe that by means of loose monetary policy the Fed could raise inflation expectations. Consequently, people would speed up buying at present knowing that goods will be much more expensive in the future. This in turn would speed up the pace of economic expansion.

“On the contrary, at the Cobden Centre we hold that the Fed’s loose monetary policy will lead to the consumption of capital, thereby inflicting damage to the foundation of the economy. Consequently, the ability of the US economy to stage a meaningful expansion will be diminished”.

Dr Frank Shostak is a leading Austrian economist and director of Applied Austrian School Economics Ltd, which aims to assess the direction of various markets using the Austrian School methodology. AASE aims to make Austrian economics accessible to businessmen.

On the Cobden Centre website he writes:

“Doesn’t additional easing amount to little more than pushing on a string? The Economist is of the view “it doesn’t”. By lifting monetary pumping the Fed could raise inflation expectations, which in turn is going to raise inflation in the present, argues The Economist.

“Consequently, this is going to lift the present demand for goods and services. (People will speed up buying at present knowing that goods will be much more expensive in the future). The increase in present demand for goods and services will speed up the pace of economic expansion – so it is suggested by The Economist.

Note that the essence of this way of thinking, which is accepted by most economists including the Fed’s Chairman Bernanke, is that what is required to revive economic growth is to boost the demand for goods and services”.

“In the real world people pay for goods and services by means of the goods and services they are producing”.

– (these are called jobs)

“Hence the more is produced the more goods people can have for themselves in order to support their life and well being”.

– (because they have wages in their pockets and can save a bit after buying essentials. What they save is a store of wealth which can be lent to others to create more jobs)

“What permits the increase in the production of goods and services is the availability of a suitable structure of production. To secure such a structure various individuals that are employed in the maintenance and the enhancement of the production structure, or the infrastructure, must be supported”.

– (this translates into ‘do everything possible to prevent unemployment. At all costs keep people working. Never think unemployment is ‘a good thing for the economy’ as some demented economists sometimes think.

Everyone wants to possess a degree of ‘wealth’.

The mirror image of the old adage “money can buy anything’ is that virtually everyone wants to work to obtain a suitable degree of wealth. All you have to do is have a means of persuading people to work. This means of persuasion is to give them something they want (money – which is just a means of exchange to enable every kind of trading, instead of using primitive barter) to do something useful for their employer.

The worker can then take this money he has just been paid for working hard for his employer making something sufficiently useful other people want to buy, and go and spend it on what he needs to buy – and save a bit for a rainy day.

This simple process is the economy; made to sound immensely complicated by ‘economists’ who make a living interfering in it, talking utter nonsense and causing incredible damage in the process.

Oh, and just one little thing which might indicate what a pig’s ear ‘economists’ and governments (and bankers !) make of our lives is the simple truth that there are, and always will be, a completely unlimited number of ‘jobs’ out there in the Universe that will always need doing. They are just there for the taking.

Figuratively speaking, everyone wants a pink Rolls Royce and a yacht; and when they have those, they want their very own spaceship to explore the Universe. And desires like these require lots of workers doing lots of jobs to meet this insatiable demand for ‘wealth’.

More realistically, there are enough jobs available on planet earth right now to usefully employ every human being willing and able to work towards eradicating ignorance and poverty, war and pestilence, and then to provide comfort and security for every man, woman and child on earth.

That’s a lot of jobs screaming out to be done by willing workers who are all out there in their countless millions just waiting in desperation for the opportunity to be able to work both to earn a useful wage for themselves and contribute to the greater good of mankind.

And when all that is achieved, and it appears there might be fewer jobs around for people to do, fear not. Because a very, very big job indeed looms on Mankind’s distant horizon which will take the monumental efforts of centuries of hard work for millions of people.

Ultimately, we need to learn how to ensure our long term survival of all the effort already put into our very existence, by escaping the ‘surly bonds of Earth’ to some other home far beyond the Solar system which is remorselessly heading towards it’s own extinction, taking us with it.

We need to put a lot of work in to ensure the long term survival of the human race – the sooner the better – because it is a very, very, very big job, enough to keep everyone busy for a very long time.

Guaranteed jobs for all from here to eternity !

Meanwhile, the reality is that unemployment, war, pestilence and poverty ebb and flow in a choking, filthy tide of ignorance and greed as it destroys everything in it’s path.

There are enough jobs available for everyone alright. It is just that incredibly stupid people stop it from happening.

All these economic & political problems have been created by banks miss-behaving and miss-managing. The problems are entirely artificial and unwanted and are purely the product of banker’s greed as they seek to divert wealth from the people who actually create it, to themselves.

In the real World where there are no bankers controlling every move everyone makes, there are literally unlimited jobs waiting to be done as humankind would wish to to advance civilisation and eradicate poverty, deprivation and mediaeval ways of life which are a disgusting product of politicians’ venal stupidity and self interest.

Bankers stop people working. Bankers destroy jobs. Bankers destroy wealth and wealth creation. Bankers destroy whole economies and damage people’s lives. Bankers are ruthless, violent, merciless, unthinking and greedily inconsiderate as all they are concerned about is their own profit. Banks do not care about destroying people’s lives; they do it all the time.

Wealth is what is created by people working away at something that needs doing. Workers create assets as they build cities and invent new and useful things to manufacture to improve modern life. Different types of workers like medical workers use skills to beaver away at looking after people while other workers beaver away at a million and one useful tasks that create all the goods and services needed to advance human civilisation. This is the real creation of wealth.

But banks interfere with all those good intentions; banks stifle and choke it with their iron grip of greed and control.

Real wealth is not “money’. Money is just a convenient invention needed to enable trade between people and avoid bartering assets between each other. Instead we use ‘money’ to measure assets and wealth and just barter money between ourselves instead.

But banks have grabbed control of all money; grabbed control of it from the governments who originated it, and have debased and destroyed it by how they have used and manipulated it.

Banks have vastly increased how much they charge the rest of us for using money in Modern Times as they learnt they could exert almost a complete stranglehold on all money by developing new banking tricks designed to grasp almost total control of all money away from everyone else – governments included.

Computers and subsequent electronic based banking processes were a godsend to feed the greed of bankers. The rest of the non-banking population was bemused by the onslaught of banking and financial market gobbledegook nonsense language designed to confuse and discombobulate everyone else not part of the magic circle of financiers.

Interest rates charged by banks have soared to ludicrously usurious levels based on pure fantasy. Banks have also invented imaginatively fictitious reasons for other charges everyone is forced to pay just to use their own money; charges which often are no more than pure fraud. But the banks get away with it. Banks have even attempted to charge people for taking their own money out of the bank to spend .

They have effectively taken away nearly all money from individuals, businesses or governments in order to then dole it out back to to everyone else, but only with onerous terms and conditions attached to it to give banks control over it and make everyone using the bank’s money the effective slaves of the banks

This enables banks to milk as much profit as they can get away with and squeeze out of the exhausted financial slaves they now control.

Because the banks have wormed their way into virtually all financial activities anyone, individuals, businesses or Governments ever engage in, the banks dictate to and control everyone through their control of the money supply, over which they have an iron grip.

They do so with only one objective in mind – making as much profit for themselves as they can possibly do so, and protecting themselves as much as possible by seeking as much domination and control of their ‘customers’ as they can get away with.

In order to make ever increasing amounts of money for themselves, the banks have needed to lend more and more because this is their principal way of making almost unlimited amounts of money to line their own pockets with. Hence the obscene banker’s bonuses stretching into the millions of pounds paid to bank staff who have skills no more remarkable or worth huge rewards than the skills of all the rest of the averagely well educated workforce.

But in their blind stampede to earn obscene profits and grow so large they now control the entire Global economy, the banks have connived to persuade and brainwash everyone into believing that borrowing ever increasing amounts of money from the banks under more and more onerous conditions is a good idea.

It isn’t a good idea at all ! Because all the borrowers are stifled and choked by the control the banks have over everything they do. Banks take away everything from their borrowers and turn them into milch cows for profit forever condemned to perpetual servitude to the banks greed.

The increasing unemployment is entirely due to the activities of the banks preventing people who want to work from doing so. The whole Global economic crisis is caused entirely by the banks – no one else.

Until someone takes away from the banks their selfish and destructive control of the money supply and puts it back into the hands of each and every individual worker who needs to use it in order to create work and therefore real, lasting actual wealth, then this economic crisis will only get worse and more and more jobs will be lost as unemployment skyrockets.

Money as debt doesn’t work because the banks own and control all the debt which they then mismanage spectacularly in pursuit of greed.

It is essential that control of the money supply is completely removed from the banks in order to rescue the World from the economic manipulation and collapse which the banks have inflicted on it !

Death to money as debt (controlled by the banks ).

Long live real money owned by the people (controlled by the people who actually use it and create real wealth) !

THE SIMPLE EXPLANATION OF HOW THE WORLD WIDE CREDIT CRISIS EXISTS AND WHAT CAUSED IT

Understanding the reasons for the Worldwide economic meltdown are not easy. This is only because the banking world wrap even the simplest of ideas in gobbledegook language no one else outside the financial industry usually understands.

That is because they don’t want anyone else to understand it, otherwise finance would lose it’s mystique and bankers would lose their sinister hold over everyone else. So, all we have to do is unwrap all this gobbledegook and use plain language instead.

let’s get straight to the point. Amongst all that pompous financial verbiage wittered by all those self important bankers is this simple truth.

If nobody had ever borrowed a penny from anyone else, and everyone had always paid for everything they had purchased only with money already in their possession, nobody anywhere would owe any money to anyone else at all.

If that was the case, and it is only an imaginary idea just to illustrate exactly where this awful financial armageddon came from which is destroying the World economy right now, then there would be absolutely no credit crisis and no financial meltdown. It would simply be impossible ! Everybody would be in complete control of their finances !

There would be no loss of jobs and no increase in poverty and no meaningful inflation either. No governments would be going bust or falling apart at the seams in their desperate attempts to be able to pay all their debts.

Everyone – governments, businesses and individuals would be in complete control of their financial lives because they would have no debts to pay. Therefore no one else would have any control over anyone else and be able to interfere in their lives and even destroy them because they owed money to the interferer.

Debt makes the person borrowing the money beholden to the lender. The borrower immediately loses control of their own lives when they borrow money.

A government, individual, business or bank which depends for survival by always being able to borrow money from someone else is not only permanently in the control of whoever lends them money, but is always a hairsbreadth away from complete annihilation if nobody is willing to lend them money anymore.

And that is exactly what has happened. The banks have gradually engineered a vice like grip over every financial transaction. They have also successfully brainwashed most of humanity into believing that borrowing nearly all the money needed for trading with each other is the proper way to conduct financial affairs whether you are a business, government or individual.

Of course it is the banks that lend the money, which is why they want everyone to believe that borrowing money for everything is the right way to do things. It is also a curious fact that people lending others money think they have a right to tell the borrower what to do and what not to do, generally boss them about and tell them how to conduct their lives – particularly when it comes to how to organise the money borrowed.

The present financial crisis arose quite simply because with everyone borrowing more and more money as the banks wished and duly persuaded them, more and more control of everyday life went from businesses, individuals and governments into the hands of the banks. And the only thing the banks knew or cared about was making more and more money for themselves.

Then the same problem of loss of control hit the banks too. This first of all happened to Lehmann’s bank in 2008 when it suddenly discovered that it could no longer borrow money from other banks to pay for what Lehmanns owed to others.

Other banks didn’t want to lend to Lehmanns because they had observed Lehmanns becoming more and more greedy, dishonest and devious with increasing suspicions of fraud as well. Lehmanns were at the forefront of driving the concept of borrowing into an arcane stratosphere of unreality where they contrived to lend the same bit of money again, and again and again – all at the same time; Lehmanns conjured up an idea where the same money could be lent almost an unlimited amount of times all at once.

When Lehmanns discovered no one else wanted to lend them any more money, that in turn meant Lehmanns couldn’t pay money it owed to other banks. Those other banks then found they, in turn, hadn’t got enough money to pay their creditors either. And so the whole sorry merry-go-round of financial industry fictional fantasy money created out of thin air collapsed. All because everyone owed everyone else ever increasing amounts of money and no longer had any control over their own financial lives.

This whole rotten edifice has been crumbling ever since Lehmanns went bust and everyone found out mendacity, fraud and corruption were rampant in the financial industry, nowhere more so than in the banks.

Banks have effectively destroyed money by completely debasing it; turning it on it’s head and making it into debt instead of money. This has resulted in the banks controlling every aspect of all of our financial lives, taking away our own ability to manage our affairs efficiently.

This is why there is a Wordwide economic meltdown of nightmarish proportions.

Quite simply, banks have succeeded in destroying the money we all need to conduct any form of trading because they turned it all into debt instead of real money. and now everyone is finding it increasingly impossible to pay it all back as the debt just gets uncontrolably bigger and bigger.